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U.S., Malaysia to Set Up Working Groups on Trade Issues

Wednesday, July 19, 2017
Sandler, Travis & Rosenberg Trade Report

In a recent meeting under their trade and investment framework agreement the U.S. and Malaysia agreed to establish working groups on goods, intellectual property, financial services, labor, and the environment. The meeting was part of a series of talks the U.S. is holding with trading partners in Asia to promote “free, fair, and balanced trade.”

In its 2017 report on foreign trade barriers the Office of the U.S. Trade Representative identified the following concerns in Malaysia with respect to the issues discussed in the TIFA meeting.

- higher tariffs on goods where there is significant local production

- import licensing requirements for a large number of goods related to import-sensitive or strategic industries, principally in the construction equipment, agricultural, mineral, and motor vehicle sectors

- restrictions on automotive imports

- availability of pirated copyright and counterfeit trademark products, high rates of piracy over the Internet, and unfair commercial use of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products

- a screening mechanism for all licensed or approved business regulated by Bank Negara that could be used to unevenly impose investment restrictions

USTR notes that in 2016 the U.S. had a $24.8 billion deficit in goods trade with Malaysia (up 14.4 percent from 2015) on $11.8 billion in exports (down 3.3 percent) and $36.6 billion in imports (up 8.0 percent). In 2015, U.S. services exports to Malaysia were $2.9 billion and imports were $1.8 billion.

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